Video editing software can blur the faces. Download a free-trial version if you don't already have it. I would use After Effects. Duplicate the layer and draw a mask around the target head to be pixellated. Then apply the Mosiac or Blur effect to the masks.

If you haven't shot it yet, have the guest in heavy shadows (or strong back lighting) and adjust the camera accordingly (to ignore that information).

First time reader (happened to find you via a technorati search on Kindle ;-)

I have the Aiptek A-HD+ (it adds a very cool 60FPS mode tht is almost surreal to see). It's a little bulky, but the ability to throw in a cheap 8GB card and get HOURS of HD recording is pretty sweet. And in a pinch it captures semi-sorta-decent stills. The main downside to me (and this is true of all the low end stuff) is no image stabilization, so your video can come out kinda shaky. But I hear the new Adobe apps have added a mode to smooth that out.

You can find reviews and info of all sorts here: http://forums.steves-digicams.com/forums/view_forum.php?id=92

does anyone have any idea how difficult it would be to electronically alter someone's fact after the footage were taken?

Heh. At first I thought it would be easy; just do a voiceover. Then I realised it was a typo. Took me a while, though :)

Most video editing software allows you to specify a region of the video for pixellation/distortion effects. VirtualDub is a good free one, for instance. Assuming that the face doesn't move around all over the screen.